OTTAWA – Given the recently launched public consultation of foreign ownership/investment in Canadian telecom carriers announced last week by Industry Minister Tony Clement, the report of the standing committee on industry, science and technology on that very topic, released late Wednesday, is more than a little anticlimactic.
The process was inspired by the situation that arose with Globalive Communications. It spent over $400 million on wireless spectrum in 2008 and was approved to operate as a Canadian wireless carrier by Industry Canada, but then denied by the CRTC in the fall of 2009 (which said due to the amount of foreign capital injected into the company doing business as Wind it did not meet the “control in fact” test), only to then see that decision set aside by the Minister.
After public consultations over many weeks this spring on the issue where it called witnesses from across the spectrum of telecom, cable, satellite, broadcasting, production and regulation, the committee’s thin report makes just two recommendations:
• That the “control in fact” test be clarified.
• That foreign ownership restrictions for Canadian satellite companies be removed (which was something in the government’s Speech from the Throne, anyway).
The report wasn’t kind to the Canadian telecom industry. It states: “The recent performance of the Canadian telecommunications industry is, on the whole, unsatisfactory. In particular, the Committee considers that the relatively low level of wireless phone penetration and the disappointing progression of broadband penetration in recent years are symptomatic that all is not well in Canada’s telecommunications industry (in terms of pricing, services offered, and the competitive environment in general).”
It also leaves as an open question how cultural objectives can be protected if foreign investment rules are liberalized: “(W)hile the removal of foreign ownership restrictions for telecommunications common carriers and broadcasting distributions undertakings may improve competition, services and prices, the following question also needs an urgent response: How can Canada’s cultural sovereignty, with respect to broadcasting content, be best protected and promoted in an era of potential complete convergence between television and Internet?”
Click here for the report (which, in truth, covers hardly any new ground, takes no bold positions and sheds very little light on the topic despite hearing from dozens of people in March, April and May).
Cartt.ca covered the hearings more extensively than any other media outlet, which you can re-read below:
Foreign Ownership: Keeping telecom and broadcasting separate is possible, says Clement
Foreign Ownership: Betcha a two-four that more foreign investment in telecom would benefit everyone
BDUs "not just pipes," says Astral’s Bureau, while Telesat’s Goldberg appeals for more freedom
New Act, new Commission powers over spectrum required, says von Finckenstein
Globalive decision gives it an unfair sixth man, which is "just wrong": Krstajic
Foreign Ownership: Telcos, cable, stand behind Commission
Telecom industry needs Canadian capital: Globalive CEO
Foreign Ownership: OECD urges Canada to open its doors; CRTC wants modified status quo
Will foreign investment hurt broadcasting, or is that just ancient thinking?
Foreign ownership restrictions hurt consumer choice and inflate prices, say Ministry officials
– Greg O’Brien
